Otelco (NASDAQ:OTEL) and Verizon Communications (NYSE:VZ) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.
Earnings and Valuation
This table compares Otelco and Verizon Communications' revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Otelco | $62.77 million | 0.63 | $7.80 million | $2.27 | 5.10 |
Verizon Communications | $131.87 billion | 1.74 | $19.27 billion | $4.81 | 11.51 |
Verizon Communications has higher revenue and earnings than Otelco. Otelco is trading at a lower price-to-earnings ratio than Verizon Communications, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Otelco has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current recommendations and price targets for Otelco and Verizon Communications, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Otelco | 0 | 0 | 1 | 0 | 3.00 |
Verizon Communications | 0 | 13 | 6 | 1 | 2.40 |
Verizon Communications has a consensus target price of $61.8421, indicating a potential upside of 11.71%. Given Verizon Communications' higher possible upside, analysts clearly believe Verizon Communications is more favorable than Otelco.
Profitability
This table compares Otelco and Verizon Communications' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Otelco | 11.05% | 31.88% | 5.53% |
Verizon Communications | 14.76% | 32.15% | 6.87% |
Institutional and Insider Ownership
10.8% of Otelco shares are held by institutional investors. Comparatively, 64.9% of Verizon Communications shares are held by institutional investors. 7.8% of Otelco shares are held by company insiders. Comparatively, 0.1% of Verizon Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Summary
Verizon Communications beats Otelco on 12 of the 15 factors compared between the two stocks.